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What are the housing needs in North Carolina?

Across North Carolina the cost of housing has risen faster than wages, putting affordable housing out of reach for thousands of North Carolina families. Over 600,000 low income families live in homes they cannot afford. Over 300,000 NC households pay more than ½ their income for housing. A family must earn at least $60,000/year to afford the average home price in North Carolina.

The greatest unmet need for housing is for households earning $25,000 and below.

What does “Affordable Housing” mean?

The U.S. Department of Housing and Urban Development (HUD) defines “affordable housing” as housing that costs an owner or renter no more than 30% of household income.

What do “Low Income”, “Extremely Low Income” and “Very Low Income” mean?

Low income means household income below 80% of area median income. Very Low Income means household income below 50% of area median income. Extremely Low Income means household income below 30% of area median income.

What is “Area Median Income (AMI)”?

Each year the U.S. Department of Housing and Urban Development (HUD) estimates Area Median family Income for the states and more specific geographic regions. We will soon have links to this year's AMI for each NC county.  To see the statistics for income and housing costs for each county from the 2000 US Census click here.

What is a “Housing Trust Fund”?

There are currently more than 300 housing trust funds in cities, counties and states throughout the United States. Housing Trust Funds (HTF) are created to provide decent affordable housing to those most in need.  HTFs are generally distinct accounts that receive dedicated sources of public funds to support affordable housing. They are generally established through ordinance or legislation and an administrative structure for overseeing its operation and expenditure.

How do other states fund their Housing Trust Funds?

Other states employ nearly two dozen revenue sources for their housing trust funds Options include: (1) Interest from state held funds; (2) Interest from real estate escrow or mortgage escrow accounts (3) Document recording fees; (4) Real estate transfer tax; (5) general fund appropriations; (6) Government obligation bonds; (7) State income taxes.


Florida – in 1992 created  state and local housing trust funds of over $200 million annually with transfer tax on deeds;

Ohio – Beginning in 2003 Ohio shifted funding for its Housing Trust Fund from a general appropriation to a county recordation fee ( generally on liens, deeds and mortgages) to generate $50 million annually;

Washington – In its current biennium budget Washington’s Housing Trust Fund will receive $80 million from sale of general obligation bonds and smaller sources of funding from interest on small escrow accounts, penalties on late real estate excise taxes, and surcharge on recorded documents.

What is “Public Housing”?

Public Housing was created with the U.S. Housing act of 1937. The program is federally funded and generally provides rental housing to very low income families (below 30% of Area Median Income). The apartments are owned and operated by a local Public Housing Authority (PHA), created by state law. PHAs are generally part of City or County government. The NC Housing Trust Fund does not fund public housing

What is “Section 8”?

Section 8 is a rental subsidy from HUD that is either tenant based or project based. The tenant based program is generally called “Section 8 Vouchers.” HUD allocates funds throughout the country generally to PHAs to administer the Voucher program. Low income families apply to PHAs to receive a “voucher” which can be used with a private landlord to pay a portion of the tenant’s rent.

Demand for vouchers is extremely high and there are several year waiting lists in NC to receive a voucher - HUD estimates that only one out of four people who need a voucher are able to access one because of funding limitations. Project based section 8 comes in a number of forms, but is generally a rent subsidy paid to a landlord for a particular unit. The subsidy stays with the unit and a tenant cannot move and take the “subsidy” with them as in the Section 8 Voucher program. Tenants generally pay 30% of their income for rent and can only be evicted for good cause.

What will $50 Million in the NC Housing Trust Fund each year do?

Assist over 6,000 North Carolina families with their housing needs each year.

Generate over 3,000 jobs each year.

Increase state and local tax revenues by over $30 million each year.

Leverage over $200 million in other resources for housing in North Carolina.

How does the NC Housing Trust Fund work?

The NC Housing Trust Fund was created in 1987 and is administered by the NC Housing Finance Agency. It provides “bricks and mortar” financing for affordable housing throughout North Carolina.  None of the Trust Fund is used for administrative costs.

The Trust Fund offers flexible financing to address the full range of housing needs in North Carolina – homeownership, rental housing, independent living apartments for the elderly, and supportive housing for persons with disabilities.

The NC Housing Finance Agency was created by the General Assembly in 1973 and is a self-supporting public agency.  Oversight of the Housing Trust Fund is done by the NC Housing Partnership, whose members are appointed by the Governor and the Legislature.

The process for spending the Housing Trust Fund is as follows:

1. General Assembly appropriates money to the Housing Trust Fund.

2. Housing Partnership approves funding for each program.

3. Each program releases Notices of Funding Availability (NOFAs) or equivalent.

4. Applications are made.

The following four programs are currently supported by the NC Housing Trust Fund, and can apply:

Rental Production Program (RPP): RPP loans are awarded in conjunction with federal and state tax credits.  For-profit and nonprofit developers submit a two-part application.  First, the proposed site is reviewed by Agency staff and a third-party market study is completed.   Then, developers submit full details for projects that scored well on site and market reviews.

Supportive Housing Development Program (SHDP): Nonprofits and local governments interested in applying have a pre-application meeting with Agency staff.  The proposed site is also reviewed by Agency staff.  After both are complete, the organization submits an application to the Agency.

Urgent Repair Program (URP): Nonprofits and local governments submit applications.

Self-Help Housing Loan Pool (SHLP): Nonprofits (typically Habitats for Humanity) apply to be members of the “loan pool”.  This process reviews the organization and its proposed developments.

5. Recommendations are made to the Agency Board of Directors.

6. After Board of Directors approval, preliminary funding commitments are made.

7. Firm commitments issued.

  • RPP: Recipients obtain all other commitments for financing.  Once complete, firm financing commitments are issued by the Agency.
  • SHDP: Recipients obtain all other commitments for financing.  Once complete, firm financing commitments are issued by the Agency.
  • URP: Once the applicant accepts the funding agreement, funds are disbursed to the applicant.
  • SHLP: Funds are committed on a first-come, first-served basis.

8. Funding recipients begin their work.

  • RPP: Construction is begun.
  • SHDP: Construction is begun.
  • URP: The nonprofit or local government accepts applications from households whose homes are in need of Urgent Repair.  Following their assistance plan, they complete repairs on homeowners’ homes.
  • SHLP: As the nonprofit builds and sells homes, it reserves program financing for eligible buyers.

9. Loan types:

  • RPP: Low-interest, amortizing loans.
  • SHDP: 0% interest, amortizing loans.
  • URP: Grants
  • SHLP: 0% interest, amortizing first mortgages.

10. Final result:

  • RPP: Affordable apartment complex is built.  Rents are lower than market rate and lower than rents on apartments built with tax credits alone.  The owner has less debt to pay due to the lower interest rate.  The owner of the development is responsible for paying back the loan.
  • SHDP: A supportive housing development is built (e.g.: a group home for the developmentally disabled or a domestic violence shelter).  The nonprofit is able to charge residents very little because they have less debt to repay due to the principal-only loan.  The owner of the development is responsible for paying back the loan.
  • URP: An elderly or disabled homeowner has urgent repairs completed and is able to remain in their home.
  • SHLP: A first-time homebuyer has purchased their first home.  The Habitat for Humanity and the agency jointly participate in the first mortgage.  The Habitat services the loan and pays the Agency its share. 

What has the NC Housing Trust Fund accomplished over the years?

Financed 19,947 homes and apartments across North Carolina.

Leveraged $669 million for new construction and housing rehabilitation.

Generated 11,000 jobs and $96.6 million of local and state tax revenues.

Won 3 awards from the National Council of State Housing Agencies for its Urgent Repair Program, Special Need Housing Program, and Home Improvement and Rehabilitation Program. In addition the NC Housing Finance Agency has won 18 national awards for its home ownership, rental, housing rehab programs and flood rebuilding work after Hurricane Fran.

What is the current Funding for the NC Housing Trust Fund?

The NC Housing Trust Fund currently receives $10 Million in recurring funding per year. Current resources are inadequate to address North Carolina’s housing needs. Other states have recognized housing trust funds as a means to spur economic activity and create jobs, while providing needed housing. Examples include Ohio, where the trust fund receives $50 Million annually, Florida, where the trust fund receives $200 Million annually, and Washington, where the Trust receives $80 Million annually.

How does an investment of $50 Million in the NC Housing Trust Fund annually help NC’s economy?  

Provides needed housing for over 6,000 low wageworkers, the elderly and disabled each year.

Generates over 3,000 jobs each year.

Expands the tax base for state and local governments by over $30 Million each year.

Revitalizes distressed areas in our communities.

Attracts new businesses by providing a range of housing options for employees.

Leverages over $200 Million in other resources for housing.

Isn’t $50 Million too much to ask for the NC Housing Trust Fund?

No. The state spends $15 Billion annually. $50 Million is only 0.3% of that amount. Commitment to other pressing needs have been addressed with significant appropriations. For example, Smart Start - $190 Million, Clean Water Management Trust Fund - $62 Million, Tuition grants - $51 Million.

Other states have realized that an investment in housing pays dividends for those in need and the economic climate in general. Some examples are Florida - $200 Million/yr. Ohio - $50 Million/yr. & Washington - $80 Million/yr. Also, the Lee Act designed to attract businesses to NC costs the state about $50 Million per year and a special session was held in 2003 to spend $36 million to attract Merck to Durham to create 300 jobs.

What is “The Campaign for Housing Carolina”?

The campaign is a new and exciting effort to promote the modernization and expansion of North Carolina’s aging and inadequate housing stock of safe and affordable homes for working families, fixed income seniors, and the disabled. Led by the North Carolina Housing Coalition, NC Justice Center, A.J. Fletcher Foundation, United Way of North Carolina, NC Coalition to End Homelessness, and NC Association of CDCs, the Campaign for Housing Carolina seeks to increase the appropriation to the North Carolina Housing trust Fund to $50 Million per year beginning in 2005.

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